Indonesia is growing its export activities but still lacks authority in manufacturing exportation, unlike three export leaders in ASEAN exporting, Thailand, Malaysia, and Vietnam, the National Development Planning Minister, Bambang Brodjonegoro, said.
According to The Jakarta Post, Bambang was quoted by tempo.co as saying, "Exports should be supported by industrialization," adding that Indonesia should focus on growing its manufacturing products for export. He said increased exports under manufacturing sectors will help drive the economy.
Bambang noted that the country should look closely at how Malaysia, Thailand, and Vietnam established its manufacturing export activities. These ASEAN countries showed more stability in exportation because they capitalized on diversified programs for local manufacturers.
Indonesia's Central Statistics Agency (BPS) said on Monday that the country posted a trade deficit of $8.57 billion in 2018, indicating that exports weakened. The downtrend could keep up if the Indonesian government and manufacturing firms do not unite to hype up the sector. Analysts said the huge trade deficit was in part due to declining global prices for some of the country's major products such as palm oil.
For Bambang, trade deficits and weak exports can be improved by exploring ways to manufacture commodities of high quality. The Minister further explained that valuable products will build Indonesia's reputation in the global market.
As if responding to Bambang's call for increased export developments, it was reported that Indonesia is planning to increase its car exports to Australia. The scheme is closely tied to the new free trade agreement (FTA) forged between the two countries.
Australia is currently not manufacturing its own cars. For Indonesia, this is a huge opportunity to potentially overtake Thailand in manufacturing vehicles for Australia. Furthermore, the FTA will allow for Indonesian carmakers to export hybrid and electric cars to the Aussie market without preferential tariffs.
Furthermore, Indonesia has been inaugurated as Hannover Messe 2020's official partner country earlier this month. The partnership is expected to attract investors to bet their funds on the country's manufacturing sectors. The cooperation will also enhance the ASEAN state's industrial production and exportation of services.
Indonesia has been working to improve its exports of diversified products. Earlier this year, the State Logistics Agency (Bulog) announced plans to export rice this year to shorten the trade deficit in this particular commodity. The country imported around two million tonnes of rice in 2018.
"There are a number of countries that we have contacted and they are ready to buy rice from Indonesia," Bulog president director, Budi Waseso, said in January. According to Budi, exporting rice is necessary to help benefit local farmers.
